Strategies of gaining competitive advantage at the generic and business unit level: A study comparing American, Japanese and German companies operating in the United States

Multinational Business Review, Spring 2000 by Shah, Abhay, Zeis, Charles, Ahmadian, Ahmad, Regassa, Hailu

Japanese companies are getting larger due to their global push and are thus emphasizing large-scale manufacturing. Consistent with earlier findings, German companies rely more on superior quality and reliability than the Japanese and US companies. Earlier studies have also found that the Japanese rely quite heavily on price in order to penetrate a market and gradually increase their market share based on low price. The Japanese have also been found to use technology to be competitive, and the findings of this study support the above.

The Japanese have been known to work very closely with their distributors in order to penetrate a market and maintain this relationship in order to stay ahead. The Japanese are also known to have very strong control of their suppliers. The findings of this study support both of these earlier propositions.

Table 4 shows what executives thought were key problem areas, which hurt implementation of strategies in their companies.

A study by Johansson and Yip (1994) found that Japanese companies complain about too much centralization. The findings of this study overwhelmingly support that view. The Japanese think that they are not getting enough support from almost the different areas in their company.

The Japanese emphasize research on intermediaries more than American or German companies. Americans pay much more attention to customer panels and focus groups than the Japanese or Germans.

One could assume that Japanese companies think that relying on intermediaries may give them an unbiased view of the customer. For instance, if marketing research is done using intermediaries, then intermediaries may be more truthful since they do not care whose products they sell, as long as customers keep coming to their store to buy any manufacturer's product.

Marketing Issues

Table 7 shows the importance respondents attached to the different elements of the marketing mix.

Japanese companies focus more attention on intermediaries and R&D before developing new products than German or American firms. The Japanese also give more importance to company policies and focus more on customers when deciding on distribution channels than the Americans or Germans. Japanese companies also pay more attention to customers before giving discounts than Americans or Germans. When setting price and giving temporary discounts, Japanese companies also give more attention to intermediaries than American or German companies. The above results clearly show that Japanese companies involve intermediaries much more than their German or American counterparts.

DISCUSSION/ CONCLUSION

This is the first study that investigates Porter's generic strategies, and business-unit level strategies of American, Japanese and German companies operating in the US. The findings show that German companies tend to behave more like US companies. Maybe this could be traced to the similar European culture shared by American and German companies. German firms have been in the US much longer than Japanese firms, and may have assimilated more and adopted more of the American practices of doing business, while at the same time also being influenced by the dictates of their parent company from their home country. There were differences among U.S., German and Japanese companies in almost all of the issues that were part of the study. However, not all were statistically significant, and one should be cautious in interpreting those that were not statistically significant.